UFood Restaurant Group has filed a voluntary petition under chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court in order to preserve its operations and to resolve its liquidity issues.
Other members of the UFood group (including its affiliates and franchised stores in Massachusetts, Ohio, Texas, Utah and Maryland) have not filed for protection.
The company's financial troubles stem from a number of factors that prevented the anticipated growth and caused some of the company's stores to be unprofitable for a significant period of time resulting in the company's current liquidity problems.
The company will pursue a plan of reorganisation to capitalise on opportunities for future growth and profitability including the evaluation of any under-performing stores, strengthening its brand strategies and the restructuring of its financial obligations along with the strengthening of its balance sheet and capital structure.
The company has obtained a financing facility that is likely to be sufficient to support it during the chapter 11 process and the company's restructuring plan has the support of its lenders.
Day to day operations and business will continue throughout the US, the company said. The company hopes the chapter 11 process will provide the company with the opportunity to restructure its finances and execute on its business model to provide sustainable profits and long-term growth.
*Source: UFood Grill *
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